SB2119

Report Title:

Tax Credit; Purchase of Hybrid Conversion Equipment

Description:

Provides tax credit for the purchase of conversion equipment, including the cost of conversion, up to 50 percent of the cost or $2,500.

THE SENATE	S.B. NO.	2119
TWENTY-THIRD LEGISLATURE, 2006
STATE OF HAWAII

A BILL FOR AN SECTION

RELATING TO A VEHICLE CONVERSION TAX CREDIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Consistent with public policy, the legislature finds that the use of low emission energy-efficient fuels is in the public interest and promotes the general welfare of the people of this State insofar as it addresses serious concerns for our environment and our state's and nation's dependence on petroleum based fuels as a source of energy. The legislature further finds that by encouraging the use of low emission energy-efficient vehicles, the State will be reducing its dependence on petroleum fuel and addressing environmental impact caused by petroleum based fuels. However, because the cost of low emission energy-efficient vehicle technologies remains high in relation to motor vehicles that employ more traditional technologies, citizens of this State who might otherwise choose a low emission energy-efficient vehicle are forced by economic necessity to continue using motor vehicles that are fueled by more conventional means. Therefore, in order to encourage the use of low emission energy-efficient vehicles and reduce the state's dependence on petroleum based sources of energy, there is hereby created a low emission energy-efficient vehicle conversion tax credit.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Credit for low emission energy-efficient vehicle conversion. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, a tax credit that may be claimed for the taxable year in which the credit is properly claimed.

(b) The tax credit shall only be available to qualified registered vehicle owners.

(c) If the tax credit under this section exceeds the taxpayer's income tax liability for the taxable year or years in which the credit is claimed, the excess of the tax credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. Every claim, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(d) A taxpayer is eligible to claim the credit against tax provided in this section if the taxpayer converts a motor vehicle that is presently registered in Hawaii to operate:

(1) Exclusively on a low emission energy-efficient fuel; or

(2) In a dual fuel mode.

(e) The total amount of any credit allowed under this section may not exceed 50 per cent of actual cost of converting from a traditionally-fueled motor vehicle to a low emission energy-efficient vehicle or $2,500, whichever is less.

(f) The maximum total credit allowed for a low emission energy-efficient vehicle conversion is $2,500.

(g) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credits made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(h) As used in this section:

(1) "Low emission energy-efficient fuel" includes:

(A) Biodiesel;

(B) Compressed natural gas;

(D) Liquified petroleum gas;

(E) Methanol;

(F) Ethanol;

(G) Fuel mixtures that contain eighty-five percent or more by volume, when combined with gasoline or other fuels, of the following:

(i) Methanol;

(ii) Ethanol; or

(iii) Other types of alcohol;

(H) Coal-derived liquid fuels; and

(I) Electricity.

(2) "Low emission energy-efficient vehicle" means a motor vehicle that as a retrofitted or converted vehicle:

(A) Operates solely on one low emission energy-efficient fuel;

(B) Is capable of operating on one or more low emission energy-efficient fuels, singly or in combination; or

(C) Is capable of operating on low emission energy-efficient fuel and is also capable of operating on gasoline or diesel fuel."

SECTION 3. New statutory material is underscored.

SECTION 4. This section shall take effect on July 1, 2006.

INTRODUCED BY:	_____________________________
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